Whether you’re a California-based company with 5 or more eligible employees, or you’re a company with 5 or more California-based eligible employees, June 30th was an important deadline for you. By this date, by law, you were supposed to have either enrolled your eligible employees in the CalSavers retirement plan or sponsored your own plan.
If you didn’t, you might be subject to fines. If you did, and you went the CalSavers route, you might be running into some user-satisfaction issues. Icon can help you deal with both.
I Missed the June 30 Deadline, Now What?
If you missed the June 30 deadline and didn’t set up your eligible employees with a retirement plan, we have two pieces of good news. First, you still have time before fines are assessed. In fact, you have 90 days from the deadline (September 28th) to get your retirement plan up and running before you’ll have to pay any fines.
Second, Icon is an easy and cost-effective way to comply with the CalSavers mandate, we can get you signed up and onboarded in minutes. We are a payroll IRA that links with your payroll provider to take employees’ contributions directly from their paychecks. Since we’re an automatic enrollment payroll deduct IRA and not a 401k, there’s no financial reporting or fiduciary responsibility on your part and we take on the administrative duties of employee onboarding and communication and plan maintenance and administration. All you need to do is provide your payroll information and approve employees’ contributions.
If you choose not to sign your employees up for a retirement plan within 90 days of the June 30 deadline, you will be subject to fines of $250/eligible employee. If, at 180 days after the June 30 deadline, you still haven’t provided your employees with a way to save for retirement, fines of $500/eligible employee will be levied against your company.
Beyond the financial penalties, you might find it difficult to attract and retain employees unless you can offer them a retirement savings benefit. The consultancy firm, WTW, recently surveyed employers of various sizes, across several industries, and found that 55% of the companies expected to have retention issues in the next two years. And 36% were planning to use their retirement benefits package as a way to attract and retain talent. So if you want to compete, you will need a retirement plan that employees will actually want to use.
Icon is that plan. With low fees, and easy plan management, Icon’s retirement plan is user friendly and customizable so every worker can find what they’re looking for. On top of that, employees own their Icon plan and can take it with them wherever they go. They never lose access to it, retaining the ability to both contribute to and manage their retirement savings plan no matter where they work.
I Signed up for CalSavers Before June 30, am I Stuck with It?
CalSavers has helped get more California workers saving for retirement, and that’s a good thing. But it’s far from the ideal retirement plan. Many employers and employees alike have found it to be a challenging system to navigate and inflexible. CalSavers also charges asset-based fees of between 0.825% and 0.95%, whereas Icon’s average fund fee is 0.07%. Lower fees help your employees grow their savings faster.
So if you signed up for CalSavers but you’re unsatisfied with your choice, we have good news. You can unenroll your employees from CalSavers and roll their accounts into an Icon retirement savings plan. Icon makes account management easy with a clean and informative dashboard. We also make it easy to rollover old accounts so your employees can start saving more, faster.
If you’re interested in rolling your CalSavers accounts into Icon retirement savings plans, reach out to a representative today. We’ll walk you through the process.
Why You Need to Offer Your Employees the Right Retirement Savings Plan
To be successful, companies need healthy, focused, talented, and productive workers. They need to retain those workers so they’re not constantly recruiting and training new people, and suffering lost productivity due to losing institutional knowledge. In order to attract and retain the talent, companies need to be successful and give employees the support they need. According to a recent survey by PwC, support means caring about employees’ financial well being.
PwC surveyed more than 3,000 workers across various industries and found that 56% were stressed about their finances and 1 in 4 had less than $1,000 saved for retirement. The workers who were stressed about finances reported using up to 3 hours of work time or more to deal with their financial worries, 18% said it had negatively affected their productivity at work and 15% said it had negatively affected their attendance. On top of that, 76% of the financially stressed employees said they were attracted to another company that cared more about their financial well being.
Many workers are struggling and one way employers can help them feel in control of their financial future is to offer a retirement plan that makes saving easy. Since Icon charges low fees, employees will see their savings grow faster, which can give them a sense of security. Icon’s plan is easy to understand and use and we offer support to both plan participants and employers so everyone has the opportunity to be successful in reaching their financial goals.